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India Shares Cap Weekly Drop Amid Uncertainty About Poll Outcome

(Bloomberg) -- Indian equities declined, reversing gains earlier Thursday. Key indexes capped their first weekly fall in four as investors continued to assess possible outcomes of elections in five states, an indicator of voter mood toward the Narendra Modi-led Bharatiya Janata Party’s national government.

The benchmark S&P BSE Sensex fell 0.6 percent to 34,981.02 at the 3:30 p.m. close in Mumbai, while the NSE Nifty 50 Index retreated 0.7 percent. The gauges wiped out gains of at least 0.4 percent earlier. Markets are closed for a holiday Friday.

The Numbers

Eighteen of the 19 sector indexes compiled by BSE Ltd. dropped, led by the S&P BSE Metal Index’s 1.8 percent retreat, while a gauge of engineering and construction firms was the only one to rise.

Automaker Mahindra & Mahindra Ltd.’s 3 percent fall was the steepest among the Sensex members, extending its slide from a record high close on Aug. 29 to 24 percent.

Votes for the phased polling that has begun in five Indian states will be counted on Dec. 11.

Strategist View

“Markets will remain volatile in the next six to nine months -- either up or down -- and investors will have to play the volatility to their advantage,” said Avinash Gorakshakar, head of research at Joindre Capital Services Ltd. in Mumbai.

“Oil price is a crucial factor for Indian equities and politics is a wild card and they will decide the direction of stocks near term,” he said.